Mar 2016 Financial News

New acquisitions lift earnings for Sagicor X fund

Mar 18, 2016

Sagicor X fund reported a 41 per cent increase in net profit for the year ended December 31, 2015, to $1.3 billion, with the increase flowing in the main from two hotel acquisitions in 2015.

The result compares to net profit of $921 million earned in 2014.

Directors stated in the preamble to audited financials that the improved earnings reflect the Group’s “strategic use of long-term borrowing as a means of enhancing earnings and returns to shareholders”.

X-Fund CEO Rohan Miller said Wednesday that for 2016, the company continues to look across Jamaica and the Caribbean for opportunities in the tourism and commercial sector. “If the numbers are right, we will invest,” he stated.

During the review period, the Fund added two high-performing assets, acquiring the 489-room Hilton Rose Hall Resort and Spa in Montego Bay and the 742-room DoubleTree Universal in Orlando, Florida.

Purchase of the Hilton Rose Hall and the DoubleTree were funded through a combination of long-term borrowings ($16.2 billion) and a rights issue by X Fund in September 2015 of $5.2 billion.

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) from the Hilton Rose Hall and DoubleTree was $1.432 billion during 2015. Net profit for the hotels was $510 million.

Through its 43 per cent interest in the Sigma Real Estate Portfolio which owns three Jewel Resorts-branded hotels; and the real estate sector by owning four office/retail shopping buildings, three industrial/warehousing properties and three prime land holdings slated for development; the group also attracted revenue of $8.52 billion.

Of that amount, $6.74 billion was earned by the Jewel hotels, with EBITDA of $2.68 billion and net profit of $2.282 billion. From earnings, 41 per cent flowed to the Fund.

The portfolio net earnings had a revaluation gain of $982 million during the period, it was also noted in the year’s results.

At December 31, 2015, the group had cash and cash equivalents of $1.07 billion, up from $711.97 million at Q3 2015 and $240.64 million at December 31, 2014.

The cash and cash equivalent excluded restricted cash of $1.657 billion held for the renovation of the DoubleTree, it was noted.

Total assets grew by $19.64 billion to $33.86 billion at the end of December 2015, up from $14.22 billion the year before reflecting the acquisitions of the Hilton Rose Hall Hotel and the DoubleTree, as well as appreciation of units in the Sigma Real Estate Portfolio, directors stated.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Jamaica Observer
Friday March 18, 2016 

http://www.jamaicaobserver.com/business/New-acquisitions-lift-earnings-for-Sagicor-X-fund-_54994